We have a situation where a mom feels her teen daughter is being “left out” by the other girls in the class. It “hit the fan” yesterday when the mom yelled at one girl to leave the class, threatened that the other girl was next.

How does one get to the bottom of this? The family who has the child who was yelled at would like to quietly step down and leave the group. She’s been involved for 5 years -I’d be heartbroken to lose them!

All with only 2 weeks left of the quietest, smoothest co-op year ever!
Oh, help, help, help!
Lisa

Lisa,
Sounds as if a lot of emotions and hurt feelings rose to the surface.

I wrote an article on Conflict in Homeschool Groups. You may read the entire article at Heart of The Matter Online.Here is part of what I say in the article:

Confession and Reconciliation

Some offenses are too large to be overlooked, perhaps because a relationship has been painfully damaged. In this case, confession and reconciliation between parties is needed. Reconciliation is gently restoring the relationship and it may involve confession on someone’s part. Each party needing reconciliation should ask themselves,

Have I said something unkind?”

Have I gossiped about the person or problem?”

Have I tried to control others?”

Confession to the other party maybe necessary in order to restore a relationship. Reconciliation isnot merely confrontation; it is restoring a relationship. Remind members to ask for God’s wisdom and a gentle spirit before they approach the other party. Each party should aim to be clear and specific.

Merely complaining about another’s behavior rarely helps a situation. The goal is restoring a relationship, not blaming or accusing others. Members should use “I feel” statements such as “I feel like a scolded child,” to explain the hurt feelings a member may suffer.

Using creativity through stories to make your point can be very helpful. An excellent example of using stories comes from the Old Testament prophet Nathan in II Samuel Chapter 12. He had the unpleasant task of confronting King David with his sins of adultery and murder. Nathan wisely used a story of a poor man with only one lamb to help David see his own greed.

I used The Peacemaker: A Biblical Guide to Resolving Personal Conflict by Ken Sande. It’s a GREAT book and highly recommended. The Peacemaker.net website has some helpful articles from Annette Friesen, their Homeschool Advisor. Search on “Homeschool” and you’ll find an article titled Preparing Homeschoolers for Conflict.

Mrs Freisen says that when a person is offended, (and several people were offended in your situation) they desire three things:

Our (homeschool group’s) yearbook is looking take in the money thru my personal paypal account, then deposit it into an separate bank account so that our Assoc. does cross over the $5000.00 mark. How is this done so that I don’t have to claim the money as extra income.

Currently the association is trying to do a paypal account not just for yearbook for membership dues, they are hesitant because they set up the a paypal account under non-profit, paypal is wanting proof of this and we don’t have it. I suggested that they explain to paypal that they we are a Unincorporated Non-Profit Assoc. and it should be fine.

Sandy in TX

Sandy,

The ideal way to operate is to set up a Paypal account for the association/homeschool group and not run anything through your personal Paypal account.

I understand from other homeschool leaders, that Paypal expects to see proof from the IRS of tax exempt status. They may also accept a nonprofit incorporation certificate from your state. They told one homeschool group they would accept “certified Articles of Incorporation.”

One homeschool registered with Paypal as “Category: Education, Subcategory: Elementary and secondary schools.” While not as accurate as “Charitable/Nonprofit”, it got the job done!

If your organization is not a nonprofit corporation or doesn’t want to be classified by Paypal as as a school, then tell your board that you are using your personal Paypal account and have them record it in the minutes of a board meeting. (“Sandy agreed to allow use of her personal Paypal account for the yearbook project”) Keep a very clear paper trail just in case you are ever audited by the IRS. Keep paper records of every transaction and especially the transfers in and out of the Paypal account. Make print outs from Paypal and file them away with wherever you keep your tax return information. (Do NOT send them to the IRS with your tax return.)

Anyone had problems setting up a Paypal account for their homeschool organization? Id like to hear your experience.

They replied to the IRS via a letter stating their case for worker status as an Independent Contractor. They heard back from the IRS and the IRS determined that the teacher was misclassified as an independent contractor and should be reclassified as an employee. The IRS wants $500 in back taxes (at least there are no penalties!) The homeschool organization strongly disagrees and contacted a labor law attorney to help draft a letter back to the IRS.

Update: The IRS issue was settled with the IRS winning the issue. The homeschool organization reclassified all their teachers as employees. There were no penalties to pay to the IRS, but then the State of Ohio audited this homeschool group and has fined them $3,000-$4,000 a year for three years for unpaid unemployment taxes. The State of Ohio sided with the IRS that the workers were employees and the organization should have been paying unemployment taxes on them. Thankfully, the state can only audit back for three years.

The issue brought to light that many (perhaps most) homeschool organizations that hire teachers pay them as independent contractors. Most homeschool groups are small nonprofits without accounting staff to manage the paperwork of withholding and paying employment taxes, creating W-2s, etc. It’s easier to deal with an IC than an employee. But the IRS reminds us the the facts of the situation determine worker status, not the organization’s preference.

Also, most hired homeschool teachers are only teaching about one hour a week and are given a lot of freedom in how to conduct their class. This was all true for my client, but the IRS still determined the teacher was an employee. She even signed a IC agreement three years in a row, so even a contract was not enough evidence for the IRS.

Here’s what I’m doing:

1. Telling my homeschool clients that hire teachers to carefully consider worker classification. Having a signed IC agreement is not enough.

2. Advising some of my homeschool clients to reclassify teachers as employees and start withholding federal income tax, Social Security and Medicare taxes. These clients hire several teachers for several hours a week and exert a lot of control over what and how they teach. One group also does teacher training and evaluations so the workers definitely look like employees.

3. Change the way my small co-op pays teachers. The IRS letter stated , “if the worker had been an independent contractor, the parents would have directly paid the worker for the services she provided for their children.” Starting next semester we will have parents pay the hired teachers directly. See Paying teachers in a homeschool co-op to read our story

4. Trying to get out the word to homeschool leaders about the potential problems of worker misclassification and in general the employment laws regarding hiring paid teachers.

Volunteers are worth their weight in gold. Most homeschool organizations are run completely by volunteers who are doing a wonderful service to their community and other homeschooling families. What’s a volunteer worth? Priceless? Independent Sector, a coalition of nonprofits, calculates the worth of an hour of volunteer time.

The estimate for the value of volunteer hour jumped by 74 cents, from $18.77 in 2006 to $19.51 last year, according to Independent Sector (IS), a Washington, D.C.-based coalition of nonprofits and foundations.

Washington, D.C. had the highest hourly value ($30.10) . The top states were all found in the Northeast: New York ($26.18), Connecticut ($25.75), Massachusetts ($24.29) and New Jersey ($23.62).

In all, 10 states eclipsed the $20 value and all but seven had values of more than $15.

Could your homeschool group survive if you paid your volunteers these wages? Probably not…they are indeed quite valuable.

I am frequently asked if a volunteer can be paid. If you pay a volunteer, she is no longer a volunteer anymore.She is an employees and your homeschool organization will owe employer taxes such as Social Security, Medicare, Unemployment and Worker’s Comp.

I recommend homeschool groups show appreciation though thank you notes, gift certificates, verbal appreciation and praying for your volunteers.

Do you ever wish that you could gather with other homeschool leaders just to receive encouragement, share resources or bend someone’s ear?

Last month, 12 homeschool leaders from seven different homeschool groups gathered on a cold winter night in Cincinnati, Ohio just to meet and support each other.

We had coffee, cookies and laughed, gently reproved and empathized with other leaders.

We came from a diverse background. Some were experienced homeschoolers-one with 15 years of leadership under her belt! Others had only been leading their group for two weeks! We had unschoolers, classical schoolers, virtual schoolers and traditional homeschoolers (whatever that means!)

After we exchanged names and information on our groups, we listed what challenges we face as homeschool leaders. Here’s what the leaders listed:

Collecting money
Doubling in size in one year
Four of five board members leaving
Facility cost
Undefined roles
Low commitment from board members
Communication
Establishing policies
Parents test limits
Clean up building
New director
Late or unprepared teachers
Need a larger facility

Any of these sound familiar? I think these are common problems. Sometimes the other leaders had helpful answers and suggestions; sometimes they just offered sympathy and encouragement. Everyone needs someone who can say, “I understand.”

I shared some resources including:

My website, HomeschoolCPA.com, for articles and ebooks on running a homeschool organization

A homeschool group in MO is applying for 501c3 tax exempt status and had a question.

Hello Carol

I am working with Crossroads Christian Connection in MO. We need to complete our 1023 (Note: He means IRS Form 1023 Application for 501 Tax Exempt Status) . The question I have is on Part X Public Charity Status. We are a small homeschooling group of about 45 families with revenue of less then $5,000 per year, on line 5, I need to know how home-school groups identify their status as a public charity.

Do you have samples of other groups that have filed the 1023?

Thanks

Greg S

Greg,

Homeschool groups are usually classified as 509(a)(2) organizations because more than 1/3 of their income comes from membership fees or “activities related to the exempt function” (box 5h).

Form 1023’s are public information so you should be able to request a copy from any other 501c3 organization. You can use the IRS website to find homeschool organizations with 501c3 status. (Go to http://www.irs.gov/charities/index.html and click on Search for Charities on the right column). Guidestar.org also posts Form 1023’s for charities.

Buying Peace of Mind
A review of forms you have prepared yourself. Save money by doing much of the work yourself. I will review Forms 1023 or Annual Form 990 and offer my opinion and advice. Cost: $100 per form. Time: 1-2 weeks.
I’m doing a review right now for a homeschool group in KY. I just sent them two and a half pages of corrections or omissions they had made on their Form 1023 as well as suggestions on how to phrase their Part III Narrative to help the IRS understand their mission. Please contact me if you’d like me to review your application before you mail it to the IRS. I’d be happy to help.

I started my website HomeschoolCPA to help homeschool organizations, but sometimes the lines between a family homeschool and a homeschool organization get a little fuzzy. Here’s one example of the new and creative ways the people are homeschooling today.

I am considering starting a homeschool with a group of 5 children. They are all from different families and none of them is my own. I have a Masters degree in education and am comfortable working as an independent contractor. I plan on teaching these children in one of the boy’s home with the parents’ blessing. Is this legal? What do I need to do to set it up? Would the parents need to set up a homeschool co-op? I am having difficulty finding information about this for Maryland. Thanks for your help!

Mrs. A in Maryland

Dear Mrs A,

Congratulations on your new venture. Teaching other people’s children is certainly a legitimate business. You will be a modern day governess. (like Mary Poppins!)

I do not believe the parents need to set up a homeschool co-op. But you need to set up a small business. I recommend these steps:

* Pick a business name, although you can use your own name

* Consider opening a business checking account to keep your business and personal expenses separate (it helps at tax time)

* Have a written agreement with the parents about your duties and your fees (i.e. how much and when will you be paid)

* Keep good records of all our expenses, especially mileage. Read my Small Business Start-up Guide available to download here: Small Business Start Up Guide

* Set aside 20-30% of your income after expenses (i.e. 20-30% of your profit) to pay income tax and self employment tax. You will probably also need to make quarterly estimates payments to the IRS.

I’m not familiar with Maryland’s homeschooling laws, but here in Ohio we must notify if someone other than the parent does a majority of the instruction. Maryland may have a similar notification rule. You might want to do a little digging on-line and ask the families that are hiring you about Maryland’s homeschooling laws.

A homeschool co-op treasurer asks about the tax filings for paid teachers:

Hi,
I am the treasurer for a new co-op we have setup this summer, and will be starting our class days in the beginning of September. I am looking to get some advice from you on how we need to define our mentors (teachers), and if we need to give them W-2’s, and if we need to with-hold taxes, etc.

We will have about 12 mentors, each teaching a class of 8-9 kids on Fridays. We follow a curriculum that the parents buy on their own. We try to keep the cost very low, so the mentors, which are all mom’s of kids in the program get paid $800 for the year.

We have already been setup as a South Dakota non-profit corporation, and would like to work towards a 501c3 in the future, but not this year. Our main issue right now is we need to move forward with setting up a checking account, which requires an EIN, and to get that we need to know if we have employees. Also, I want to determine how I need to be paying them, as far as tax with-holdings, etc.

Thank you,
Doug M, SD

Doug,
Congratulations on your new co-op. It sounds as if you are off to an great start! You should be very proud of all that you have accomplished.

As you described the co-op’s relationship with the paid mentors, they should all be classified as employees. Your co-op exercises quite a bit of control by telling them what curriculum to use, so they are not independent contractors.

IRS Publication 15 Employers Tax Guide has a nice checklist of forms and dates that you’ll need to file:

You should collect a Form W-4 from each employee for their information and federal tax withholding To make your job simpler you can tell your employees that the co-op will not withhold federal or state income tax since their wages are relatively small. The W-4 is kept by you and not mailed into the IRS.

The co-op will be responsible for paying federal employer taxes (Social Security and Medicare) and filing quarterly statements with the IRS (called a Form 941). See IRS Publication 15

If you have 501(c)(3) tax exempt status, your co-op would be exempt from Federal Unemployment tax. But the tax is rather small at 0.8% (See Form 940 and its Instructions)

At the end of the year you will issue a W-2 to each employee and mail copies of the W-2 and W-3 to the Social Security Administration. See Pub 15 (above) for details.

South Dakota may have unemployment tax requirements and workers compensation payments. Contact your state’s department of taxation or employment for details. I’m no expert on SD taxes, but here is a place to start: SD New Hire Reporting

Conflict-it happens in any group of people and homeschool groups are no exception! Maybe it’s worse in a homeschool group because homeschool parents are typically independent-minded, confident people. Its a wonder we get along with each other at all!

We had an example of this at our homeschool co-op recently. There was a disagreement between our nursery coordinator and one of the mother’s about how to clean the toys in the nursery. Both ladies showed genuine respect for the other’s concerns (Affirm). They agreed that safety of the children was important to both (Understand). Where they differed was that the nursery coordinator wanted to use only natural products, while the mother, a physician, was concerned that the natural products wouldn’t kill the germs and wanted to use stronger chemicals. These ladies did research, gathered facts and shared them (Search). They looked for creative solutions. They chose to focus on the problem-cleaning the toys without endangering the babies-and they avoided the temptation to lash out personally or gain control (Evaluate options, don’t argue). They did bring our co-op director into the situation, so that she would know what was happening (Prepare).

Our co-op director told the board that several options were being considered and that the two ladies were working together on a solution. She raved at how mature and respectful they were to each other. Unfortunately, we did have a problem with other people in the co-op. Some people not involved in the discussion were inflaming the issue by interfering where no interference was needed. Sometimes we need to remember to PAUSE and to mind our own business.

Happy Customers:

"You took an enormous amount of stress off of me Thank you for serving the homeschooling community. What a great blessing you are to our growing community."
Nicole in IL

"Thank you so much for your assistance as we pursued non-profit status. It was such a blessing to us knowing that you were available to help us with questions and to give us needed guidance."
Mary in TN

Every time I go on your website I learn something new and helpful. I have a special section in my co-op binder entitled "Carol Topp advice." - Wendy, homeschool board member